The Patna High Court allowed the petitioner's writ petition held that a non-speaking order cancelling GST registration without stating reasons violated principles of natural justice and set it aside directing reconsideration of the issue.
Impugned order dated 01.04.2022 set aside and matter directed to be reconsidered.
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IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.6300 of 2023
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Maa Construction through Arbind Singh, aged about 51 years, male, Son of Ranjit Singh, Resident of Village - Madanpur, Post Office - Naraw Chapra, Police Station - Ramavtar Nagar, District - Saran.
... ... Petitioner/s
... ... Respondent/s
====================================================== Appearance : For the Petitioner/s : Mr. Amit Kumar, Advocate For the Respondent/s : Mr. Anil Kr. Singh, GP-26 ======================================================
CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE MADHURESH PRASAD ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE)
Date : 29-04-2023
The petitioner is aggrieved with the order for cancellation of registration dated 01.04.2022. An appeal was filed which was delayed, which also stood rejected. Insofar as the Bihar Goods and Services Tax Act is concerned, now there is no Tribunal constituted for the State.
2. In such circumstances, we have looked at the order dated 01.04.2022, especially since the learned counsel for the petitioner has argued that it is a non-speaking order. We see from the order that there is no reason stated as to why the cancellation was ordered and not even the subject of the notice
Patna High Court CWJC No.6300 of 2023 dt.29-04-2023 2/4
is referred to in the order.
3. It is the submission of the learned counsel for the State
that the form GST REG-19 has been adopted by the Assessing Officer.
4. We extract form GST REG-19:-
5. As we see from the Bihar Goods and Services Taxes Rules, 2017, GST REG-19 has a specific column where reasons have to be assigned. However, the Assessing Officer seems to be laboring under the belief that when an assessee does not appear or an objection is not filed, no reasons have to be assigned.
6. We cannot countenance the said order, especially when
there is absolutely no reason stated regarding the cancellation of
Patna High Court CWJC No.6300 of 2023 dt.29-04-2023 3/4
registration.
7. We also notice the judgment of another Hon'ble Division Bench of this Court passed in Manoj Kumar Sah versus The State of Bihar and Anr. in C.W.J.C. No. 18307 of 2022, wherein it has been stated so:-
" It cannot be disputed that with the passing of the said order, petitioner is liable to both civil and penal consequences. To say the least, the authority ought to have at least referred to the contents of the show cause and the response thereto, which was not done. Not only the order is nonspeaking, but cryptic in nature and the reason of cancellation not decipherable therefrom. Principles of natural justice stand violated and the order needs to be quashed as it entails penal and pecuniary consequences. "
8. The impugned order in the instant writ petition also suffers from the very same illegality which has been pointed out by the Division Bench. In such circumstances, we set aside the order dated 01.04.2022 and direct reconsideration of the issue.
9. In this context, we also notice that notification No. 3 of 2023 has been brought in by the Central Government on the recommendations of the G.S.T. Council wherein if the cancellation has been effected for failure to file returns under clause (b) or clause (c) of Sub-section (2) of Section 29, there is a further period allowed up to 30.06.2023, wherein the registered person can apply for revocation of cancellation. This
Patna High Court CWJC No.6300 of 2023 dt.29-04-2023 4/4
is also subject to the condition that the return should be filed up to the effective date of cancellation of registration and the payment of tax, interest, penalty and late fee in respect of such returns have also been made. The assessee would also be entitled to avail of the said remedy if the cancellation has been effected under clause (b) or clause (c) of Sub-section (2) of Section 29.
10. The writ petition stands allowed.
(K. Vinod Chandran, CJ)
(Madhuresh Prasad, J)
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2 issues framed by the court
Whether the order cancelling GST registration which is non-speaking and stateless violates principles of natural justice and require quashing.
Whether the higher judicial authority ought to have stated reasons along with the order of cancellation of registration of the taxpayer.
Colour shows how this judgement treated each authority
Manoj Kumar versus The State of Bihar and Anr.Referred¶24
Manoj Kumar versus The State of Bihar and Anr. in C.W.J.C. No. 18307 of 2022
3 provisions across 3 enactments
Maa Construction
State of Bihar
Additional Commissioner of State Tax
Hon'ble The Chief Justice
Madhuresh Prasad
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
